BT Pension - Increased Transfer Values

mbee123

Hi, Looks highly likely I'll be taking my redundancy from my present role at the end of March at the age of 51 so looking closely at pension options.

I am a section C deferred member of the BT scheme where the majority of my pension is, I was planning on taking my BT Pension early as they have reduced there Actuarial Reduction factors favorably. More details here:-

https://forums.moneysavingexpert.com/discussion/5875666/bt-pension-retirement-statement&highlight=bt

I was looking at around £9200 /year plus a £61.5k lump sum.

However, I just received a transfer out quote from the portal and the figure is coming out almost 28 times my annual pension (£15,819) at £441,580.

This far exceeds my previous quote from them which was less than 21 times my annual pension.

I have requested a formal quote to verify the figures but the CETV sounds very favorable to me, appreciate feedback, has anyone else received improved offers from BT?

Linton

It does look pretty good at first sight from a quick and dirty calculation of what would happen if you used the CETV money to get something equivalent to the DB pension:


CETV: £441580
minus DB lump sum of £61500:£380080
minus £50000 cash buffer to avoid depleting lump sum during a crash:£330080
Annual inflation adjusted income assuming 3.5% drawdown of original lump sum:£11553


Compare this with the £9200 DB pension, I assume taken at 55.


I am not suggesting this is how you actually manage the money, its just to compare the 2 options. You would need to get an IFA recommendation which would provide a little more detail!

mbee123

Thanks Linton

Compare this with the £9200 DB pension, I assume taken at 55.

I would be taking the £9200 in April at 51, this is allowed with BT as a deferred member.

I have another £7000 p/a income from property, the plan was to use the two amounts to tide me over while I look for work or supplement a smaller wage, or try something else like property development, which the CETV sum would help with, along with my redundancy payout (£45k)

Silvertabby

Remember that, if you do transfer, you won't be able to touch any part of your CETV before age 55.

Pension_Geek

Silvertabby wrote: »

Remember that, if you do transfer, you won't be able to touch any part of your CETV before age 55.

Unless you 'Buddy transfer'.

mbee123

Originally Posted by Silvertabby View Post
Remember that, if you do transfer, you won't be able to touch any part of your CETV before age 55.
Unless you 'Buddy transfer'.

Hmm, this could be a game changer for me, i could do with accessing at least £60k of this, don't think the buddy transfer is an option as i don't have any BT buddy's!! (if my understanding is correct!) Any other options of releasing part of the pot before 55?

Silvertabby

“ Remember that, if you do transfer, you won't be able to touch any part of your CETV before age 55.
Originally posted by Silvertabby

Pension_Geek wrote: »

Unless you 'Buddy transfer'.

Yes, but what are the chances of OP finding another deferred BT pension fund member who wants to transfer to the same 'other' pension scheme at the same time - especially once you factor in both having to obtain independant financial advice?

Silvertabby

“ Originally Posted by Silvertabby View Post
Remember that, if you do transfer, you won't be able to touch any part of your CETV before age 55.

Unless you 'Buddy transfer'.

mbee123 wrote: »

Hmm, this could be a game changer for me, i could do with accessing at least £60k of this, don't think the buddy transfer is an option as i don't have any BT buddy's!! (if my understanding is correct!) Any other options of releasing part of the pot before 55?

No, I'm afraid there isn't. And run - fast - from anyone who tells you otherwise, because they will be scam merchants.

kidmugsy

Silvertabby wrote: »

Yes, but what are the chances of OP finding another deferred BT pension fund member who wants to transfer to the same 'other' pension scheme at the same time

Is it really beyond the wit of man to set up a website for this very purpose?

mbee123

Thanks for the replies so far, most helpful although I may have to change my plans a little.


Back to the original question, has anyone else had a recent CETV from BT and if so has the value increased or not? or have any info as to why the terms are improved?

camelopardis

mbee123 wrote: »

Thanks for the replies so far, most helpful although I may have to change my plans a little.


Back to the original question, has anyone else had a recent CETV from BT and if so has the value increased or not? or have any info as to why the terms are improved?

Yes.
I requested a CETV from the Pensions Portal on 23/11 which gave a figure of approx 241K.
After reading your post, I requested a new figure today which was approx 298K
This represents an increase from 22x to 27x


I dont want to CETV but I'm sure these new rates will be of interest to others.

kidmugsy wrote: »

Is it really beyond the wit of man to set up a website for this very purpose?

This has been suggested before - Xylophone should take the credit
https://forums.moneysavingexpert.com/showpost.php?p=71136577&postcount=5